The Internal Revenue Service and the Treasury Department published a notice saying they intend to issue proposed regulations involving the transfer of United States real property interests, making it easier for foreign-traded public companies to move to the U.S.
In Notice 2025-45, the IRS and the Treasury would modify the rules that apply to certain inbound asset reorganizations under Section 368(a)(1)(F) of the Tax Code that constitute a “covered inbound F reorganization.”
The notice also announces that the Treasury and the IRS intend to issue proposed regulations to clarify that qualification of a potential F reorganization would not be affected by a disposition of stock in either the transferor corporation or the resulting corporation if that disposition is not included in the plan of reorganization.
The Treasury Department and the IRS believe that such “redomiciliation transactions” do not give rise to policy concerns because they don’t create a risk of inappropriate avoidance of Section 897. Accordingly, they have determined that exceptions to the gain recognition rules are appropriate in certain limited circumstances.
